Lettuce prices suffered their steepest monthly fall on record in July as a multistate cyclospora outbreak pushed diners to avoid the leafy green entirely.
Prices for the vegetable dropped 16.4% from June, the largest single-month decline ever recorded, according to seasonally adjusted data from the Bureau of Labor Statistics.
Lettuce also posted the sharpest month-over-month deflation of any item within the consumer price index’s food category in July, which saw overall food prices rise just 0.1%.
Jeremy Horpedahl, an associate economics professor at the University of Central Arkansas, said the cause was clear, explaining that it is “very likely due to the cyclospora outbreak and consumers just not wanting to buy lettuce right now.”
Horpedahl added that the “consumer is just wanting to stay away from this product,” underlining how deeply the outbreak has shaken public confidence in the vegetable.
Despite July’s sharp decline pulling prices off all-time highs, lettuce remains around 7.5% more expensive than a year ago, more than double the broader rate of CPI food price growth.
The earlier price surge had been driven by fertilizer costs climbing due to the Iran war and increased labour costs at US farms following President Donald Trump’s mass deportations programme.
The Food and Drug Administration identified iceberg lettuce processed at a Taylor Farms facility in central Mexico as the likely source of the waterborne parasite’s spread, prompting a voluntary recall from the company.
Several restaurant chains reported notable traffic declines linked to consumer fears, even where their own supplies were confirmed to be unaffected by the contamination.
Cava (CAVA) CEO Brett Schulman told CNBC that there were “broader consumer concerns” around leafy greens and fresh produce that affected near-term sales toward the end of its second quarter, though he said sales trends have begun to rebound.
Chipotle (CMG) reported that cyclospora created a sales impact of around 2 percentage points in the back half of July, with executives telling analysts the chain had a “very robust” food safety programme and that its lettuce supply was unaffected.
Yum Brands CEO Chris Turner said the outbreak resulted in a “meaningful near-term sales impact” for the company, whose Taco Bell chain was among the first linked to the outbreak by the FDA, though Turner added that sales had been “steadily improving.”
Sweetgreen lowered its full-year outlook after reporting reduced demand caused by the outbreak, with the salad chain’s leadership uncertain about when a full recovery would occur, sending investors to sell shares following the announcement.
Dollar sales of prepackaged salads plunged 14% during the four weeks ended July 25 compared with the same period a year earlier, according to NielsenIQ data, reflecting the scale of the consumer retreat.
Horpedahl noted that while falling prices would normally be welcome news for inflation-weary shoppers, the reality is far more complicated given persistent food safety fears, saying “consumers are not going to rush out and buy this now just because it’s cheaper” and that “it’s fallen because nobody wants it.”